Here is a little bit of interesting news, if you watch your dollars and your real estate purchasing power. For the real estate consumer who wants to find their dream home, this may be very disturbing information. The last month for which figures are available, November 2013. These numbers are from the National Association of Realtors for November 2012 and 2013.
November 2012 Average Price = $227,900 Interest Rate = 3.32 Principle and Interest = $1,000.61
November 2013 Average Price = $244,500 Interest Rate = 4.29 Principle and Interest = $1,208.53
What this means is that buyers who waited to buy real estate this year instead of last year, saw real estate prices go up and mortgage interest rates go up. With increased real estate prices, and rising mortgage interest rates, real estate purchasing power for consumers decreased a whopping 9.7%. Simply put, a real estate home buyer who qualified for a house valued at $200,000 in 2012 now qualifies for a house valued at $180,600. Couple this with an increase of real estate home values of just over 7%, the true value of a house that same buyer can buy this year compared to last year, using $200,000 as our model, is now $168,000. This translates to $32,000 in lost consumer purchasing power.
To a buyer, this could mean you can no longer buy in the neighborhood you want to be in. Or it could mean you simply can't find a house large enough. Or you can't get a home in the school district you want. Or it may mean you will stay in your current home. This year, home prices are rising, perhaps even more than last year, and there are experts predicting mortgage interest rates will be close to 6% by year's end. If you are in the market to buy a home, protect your real estate purchasing power and do not wait. Act now or you just might miss the opportunity to buy your dream home. Start searching for your home now. Don't procrastinate!!
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